Question: Consider the following two mutually exclusive alternatives (do not consider the Do Nothing alternative). Each alternatiive has a 10-year useful life and no salvage value.

Consider the following two mutually exclusive alternatives (do not consider the Do Nothing alternative). Each alternatiive has a 10-year useful life and no salvage value. If the MARR is 11.0%, which alternative should be selected? Answer in terms of incremental rate of return analysis

Cash Flow

A

B

B-A

Initial cost

(-$60,000)

(-$90,000)

(-$30,000)

EUAB

$10,000

$15,000

$5,000

Please solve by hand, I am not allowed to use excel

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